International demand increases for prime London property

KUALA LUMPUR: The 14% decline in the value of the pound against the US dollar since last summer is a significant boost to many overseas buyers with dollar assets, according to Black Brick managing partner Camilla Dell. Black Brick is an independent property buying agency covering London and the home counties of Kent, Surrey and Sussex.

“We are of the view that the upcoming UK election and uncertainty over the eurozone will not take much wind out of investor enthusiasm for prime London properties,” Dell said. “With vendors increasingly nervous about the prospect of further tax changes affecting high-end properties post-UK general election, we continue to believe that the current environment provides an excellent opportunity for those with a long-term prospective.”

Prime central London property prices registered a 4.2% drop in the fourth quarter of 2014, and buyers are now faced with a 5% hike in stamp duty land tax (SDLT).

However, according to Black Brick, there has been scant evidence of deals falling through due to the SDLT changes, reflecting the market’s ability to absorb higher tax rates and adjust accordingly.

Figures recently released by the UK government revealed that the proportion of investor visas granted to Chinese nationals investing at least £1 million (RM5.45 million) in the United Kingdom doubled to 43% between January and September 2014, while it stood at 10% five years ago.

A recent research commissioned by international law firm Pinsent Masons estimates that investments of over £36 billion are expected to flow from China into UK real estate between now and 2025, and that by 2025, the annual Chinese investment in the UK will reach £30 billion.

“Against the slowing Chinese economy and falling prices in the Chinese property market, high net worth Chinese individuals are increasingly looking abroad for investment opportunities,” said the company.

Following policy changes in October last year, foreign applicants are now required to invest £2 million or more in UK government bonds, share capital or loan capital in active and trading UK-registered companies to be eligible for an investor visa.

This article first appeared in The Edge Financial Daily, on January 23, 2015.